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Conflict Diamonds

Prepared by Jon Masin-Peters, University of Massachusetts , Summer 2003

Background

During the past five years, substantial attention has been paid to the issue of "conflict" or "blood" diamonds. Diamonds from countries such as Sierra Leone, Angola, Liberia and the Democratic Republic of the Congo (DRC) have been used to fund combatants, both rebel and government, whose main targets are often civilians. The civil wars during the 1990's in Sierra Leone left 50,000 dead, and 500,000 died in Angola. The violence in Angola escalated during a six-month period in 1993 in which 180,000 died. Both government and rebel soldiers committed atrocities and used amputations as a way to coerce and terrorize the countryside. Diamonds played a key role in obtaining funds to provide these combatants with food, clothing, transportation, and most significantly, weapons. Finding buyers wasn't particularly hard and rebel groups such as the RUF in Sierra Leone and UNITA in Angola obtained approximately $200 million per year from these sales.

Diamonds became a central issue for a number of reasons. First, rough diamonds (which are later polished into gemstones) represent an $8 billion dollar annual market. Secondly, the trading centers into which these stones flow, such as Antwerp, Tel Aviv, and London, as well as major consumer markets such as the United States have relatively scarce supplies. Thirdly, the diamonds in Sierra Leone are of very high quality (as opposed to industrial diamonds, which cannot be used for jewelry) and they are alluvial—that is, they are found on the earth's surface, usually in river beds, and are accessible to anyone with a few basic hand tools and skills. And with governments acting essentially as organized crime syndicates, these resources quickly became the property of whoever had the monopoly on violence at the time.

Non-Governmental Organizations and the UN

The conflict diamond issue first came to the public's attention in 1998 when a small, London-based non-governmental organization (NGO) named Global Witness (see their press releases and reports) released a report titled A Rough Trade. This report detailed the way in which Angolan rebels were smuggling diamonds into the international markets. The revenues generated during this wartime economy were in excess of $250 million/year. Implicated in the report was the South African diamond cartel, De Beers, which at that point marketed approximately 80% of the world's rough diamonds. This report placed significant pressure on the diamond industry, who feared that their product would attract the sort of negative publicity once associated with another luxury item, fur coats. Additionally, the UN Security Council seized upon the report and imposed sanctions—resolution 1173—upon any diamonds being exported from Angola. These sanctions did little to stop the flow, as the details of "sanction busting" became evident in the UN's Fowler Report S/2000/203. However, the death of rebel leader Jonas Savimbi in February 2002 led to a lasting peace agreement between government forces and UNITA. With relative peace in the country, the Security Council lifted all sanctions in 2002 under resolution 1448.

Another NGO played a substantial role in bringing attention to the issue. Partnership Africa Canada, an organization which works on issues of human rights and security, released a report in 2000 titled the Heart of the Matter in which the brutal diamond economy of Sierra Leone was revealed. The UN Security Council soon took action and banned the import of rough diamonds from Sierra Leone (Resolution 1306). Again, these sanctions seem to have done little, but fighting did cease in 2001. Sierra Leone is currently home to 17,000 UN peacekeepers, the largest such force in the world. (See Kofi Annan's updated report on the country from June 2003.) Other NGO's have also been able to affect policy, including Oxfam America, Global Policy Forum, and Amnesty International. Additionally, organizations such as the International Crisis Group have issued lengthy reports on countries at war, including Angola and Sierra Leone.

The Kimberley Process

In response to the international outcry over the role of diamonds in sustaining armed conflict, an assortment of governments, industry bodies, and NGOs have worked together to devise a system for excluding conflict diuamonds from the legitimate gem trade. The resulting Kimberley Process is the new set of standards which approximately 70 countries have agreed to be part of. It is a certification scheme that seeks to track diamonds from the mine to the retail counter by using a certificate system. It is endorsed by the United Nations and went into effect on January 1, 2003. Many scholars and NGO's such as ActionAid are skeptical of the ability to trace an item as easily smuggled as diamonds. Global Witness and others are calling for independent monitoring of the process. As of right now it is up to each member state to come up with their own export/import certification scheme. This is troublesome because many of the government officials in countries such as Sierra Leone were/are extremely corrupt. However, most critics agree that the Kimberley Process is at least a step in the right direction.

United States Position

On April 25, 2003, President Bush singed into law HR 1584, The Clean Diamond Trade Act, imposing restrictions of the sort envisioned in the Kimberly process. Initially, the administration voiced concern that the Kimberley Process would interfere with World Trade Organization (WTO) rules; however, the WTO signed a waiver for the Kimberley Process, giving its okay through 2006.

Industry Links

The World Diamond Council was formed in 2000 as a response to conflict diamonds and represents the industry as a whole. Here is the link to their pamphlet on implementing the Kimberley Process.

The Diamond High Council (HRD) represents the Belgium diamond industry, which is important because Antwerp is the key transit point for the majority of the rough diamonds in the world.

At one point De Beers controlled 80% of the rough diamonds in the world. They currently control about 60%, as they now compete with other firms and have essentially stopped "managing supply" as of 2000.

Bibliography

Cilliers, Jakkie and Christian Dietrich (eds.), Angola's War Economy (Pretoria, South Africa: Institute for Security Studies, 2000). This book can be accessed on the web at: http://www.iss.co.za/Pubs/BOOKS/ANGOLA.HTML. Some relevant chapters include: